Whether you're buying a home for the first time or have navigated the process before, choosing the right home loan is key to long-term financial happiness with your next home. The number of loan options available can feel daunting to sort through, but the good news is there's a loan product to suit the needs of nearly every buyer. The trick is finding the right one for you. Get started with our guide to some of the most common types of home loans and how they might fit your needs.

• Conventional Loans
  • Conventional loans rank among the most commonly used loans, and there are two types available. Conforming loans are backed by Fannie Mae or Freddie Mac, with maximum loan limits set by the county. Borrowing with a conforming, conventional loan will allow you to make a lower down payment but may require a higher interest rate than other loans. In most cases, you will be required to pay private mortgage insurance (PMI) if your down payment is less than 20 percent.

• Jumbo Loans
  • The second type of conventional loan is a non-conforming mortgage, often referred to as a jumbo loan. A Jumbo loan is typically used to purchase homes in affluent areas, where home values are higher than the limits for conforming loans. A jumbo mortgage requires excellent credit, a significant down payment, and extensive documentation to prove that the loan will fit within your finances.

• FHA or USDA Loans
  • There are also a variety of government-insured loans available, including  FHA and USDA loans. FHA loans are a popular tool for first-time home buyers because they require low down payments and are available to buyers with less-than-perfect credit. USDA loans are primarily used to purchase homes in low-income or rural areas and may not require any down payment for buyers who meet certain income limits.

• VA Loans
  • The final type of government-insured loan is a VA loan, which is available to military members (active or veteran) and their families. VA mortgages are very flexible , with low interest, no down payment needed, and no requirement to purchase PMI. These loans are generally considered a great option for military buyers because of the flexible terms and minimal requirements.

• Fixed-Rate Loans
  • When analyzing mortgage options, it's also important to consider how your loan terms might change over time. If you want financial certainty and have the opportunity to lock in a low rate, then a fixed-rate mortgage may provide just what you're seeking. With a fixed-rate mortgage, your interest rate is locked in for the duration of the loan, with terms that usually last for 15, 20, or 30 years. It takes longer to build equity with a fixed-rate mortgage, but choosing a fixed rate allows you to budget precisely for the life of the mortgage.

• Adjustable-Rate Loans
  • Unlike with a fixed-rate mortgage, your interest rate on an adjustable-rate mortgage can change over time based on market conditions. Some adjustable-rate mortgages will offer a low, fixed interest rate for the first few years, followed by fluctuating rates after the initial term. While adjustable-rate mortgages can offer lower interest rates to start, they also come with risks. Higher interest rates can make your payments unmanageable over time and may also make it harder to refinance if home values drop.

Choosing the right type of home loan is a big decision, so it's crucial to gather as much information as possible and seek advice from trusted advisors. If you would like to speak to one of our preferred lenders, please fill out contact form on this page. Or contact us today!